Anthony Albanese says he knows people are struggling with rising interest rates but inflation isn’t a switch that can be turned easily on and off.
As the Prime Minister faced questions over his handling of the economy on Friday, he linked the cost of living crisis with the economic turmoil caused by Russia’s invasion of Ukraine.
The ongoing conflict in eastern Europe led to a global spike in the price of energy and food security issues that had inflated prices around the world, Mr Albanese said.
“Australia is faring much better than most places in the industrialised world,” he told ABC Radio Melbourne.
Domestic inflation is at 7.3 per cent, its highest level in more than 30 years, with many Australians struggling not only with the cost of living but with soaring mortgage repayments caused by interest rate hikes.
The Reserve Bank has come under fire for its decision to rapidly lift the cash rate to 3.35 per cent, its highest in more than a decade, in a bid to slow consumer spending and clamp down on inflation.
The central bank’s governor, Philip Lowe, whose seven-year term will expire in September, has been roundly criticised for having told Australians he expected interest rates to remain at historic lows until 2024.
Mr Albanese said on Friday that Dr Lowe had the government’s confidence and would continue to do so for at least the remainder of his term.
“But as for future appointments, that will be a decision made down the track,” he said.
“I’ll let the RBA do its own job. We have made it very clear that the government hasn’t come to a view on a reappointment into the future.”
Asked if there was anything else that could be done to lower inflation apart from hiking interest rates, Mr Albanese said: “Well, there is, but it’s not a light switch you can just flick on or off.”
He said the government needed to show spending restraint to avoid making inflation worse, but energy bill rebates expected to flow through to Australians later this year should take some of the pressure off.
Mr Albanese said earlier this week the government’s fiscal approach had been vindicated by Dr Lowe’s evidence at a senate estimates hearing on Wednesday.
“Have a look at the evidence of the Reserve Bank governor today or the head of Treasury who spoke about the fact that our plans are actually making a difference,” he told parliament.
Mr Albanese was in Melbourne on Friday morning to launch former unionist Mary Doyle as the Labor candidate for the Aston by-election triggered by the sudden resignation of ex-Liberal cabinet minister Alan Tudge.
Story Credit: news.com.au